March 12, 2008

Are We There, Yet? Are We There, Yet? Are We There, Yet?

First, I'd like to apologize for not posting earlier. But I have an excuse! One, I've been getting my tax forms in order and have needed to correct 2 previous year's forms. And two, I've been working on getting the 2nd part of my ETF Locater/Tree completed, which I will post here as soon as I am finished. I think that it will be a VERY useful reference material and worth the wait. And three, not much has changed in the market and there just isn't a need to keep saying "Stay in Cash!". Yeah I know we just had an up 400 point day and that's nothing to sneeze at. But before it means anything, we need to have a follow-through day. The market today, although down was still very palatable given that digestion of yesterday's action was imperative. This move is definitely something to be watching. However, there are still some solid negatives out there - first and foremost of which is the fact that we have not had the fall-out news of the deterioration of money market accounts, and all that implies which I first wrote about in my Investment Letter sent out on November 12, 2007 (see Blog Archives). So for now, as far as I'm concerned, the bear is as big and bad as ever and there remains the potential for some terrible days and weeks ahead. DO NOT LET YOUR GUARD DOWN. You are better off by missing the first few days when we emerge from the bear market than to participate in every fake-out that the bear markets give. I am not comfortable advocating short selling either. Bear markets maul both longs and shorts (you don't think that there are some shorts hurting from that up 400 point day? Especially when people can now buy leveraged short ETFs, effectively getting exposure to 2x the market movement in a sector?). The best thing to do now is research some stocks that are potential leaders when we emerge from the bear market. These are NOT recommendations, but some stocks I am currently investigating that might fall into this group include: BOLT, CRDC, VDSI and ZOLT. One other stock that has huge potential as a special case is CHS, but I need to research a bit more. But it looks like a cash generating machine - they just need to temper their growth plans.

I will try to post more frequently, with shorter posts. Best of luck to you all.


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Anonymous said...

Since you mentioned that you have been getting your tax forms in order...

Here's a little-known fact: if you are a bad person in this life, then when you die, you don't burn in hell or some nonsense like that. Instead, you sit in a small room and spend eternity preparing Schedule D forms for active traders. In addition to countless transactions, the active traders will have held many stocks in companies that were parties in complicated mergers and spinoffs, too, in order to make the cost basis calculations extra fun. There will also be a constant stream of Amended 1099's from mutual funds.

Anonymous said...


Which online stock charts website do you consider the best?

Also, what technical indicators do you consider most reliable in your work?

A blog entry (or series of entries) about this would be greatly appreciated.